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Financials

Unaudited Financial Statements and Related Announcement for the First Quarter and Three Months ended 30 September 2018

Financials Archive

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Consolidated Statement of Comprehensive Income

Profit & Loss

Balance Sheet

Balance Sheet

Review of Performance

STATEMENT OF COMPREHENSIVE INCOME

Revenue

1QFY2019 vs 1QFY2018

The Group posted revenue of approximately S$4.11 million in 1QFY2019, 18.4% higher as compared to S$3.47 million in the previous corresponding period in 1QFY2018. The higher revenue was attributed to higher rental income received from additional leased units in 12 Tai Seng Link, Loyang Enterprise and ACE@Buroh.

Gross Profit Margin

1QFY2019 vs 1QFY2018

The Group recorded a gross profit of approximately S$2.58 million in 1QFY2019, as compared to a gross profit of S$1.95 million in 1QFY2018. The higher gross profit achieved in 1QFY2019 was due to cost of sales associated with rental income remaining relatively constant in both quarters.

Other income

1QFY2019 vs 1QFY2018

Other income for 1QFY2019 was 97.1% lower at approximately S$.0.05 million as compared to S$1.67 million in 1QFY2018. The decrease in other income was largely attributed to the absence of one-off income derived from the sale of assets held for sale in 1QFY2019 compared to 1QFY2018.

General and Administrative Expenses

1QFY2019 vs 1QFY2018

General and administrative expenses for the period was down by 19.5% from approximately S$2.08 million in 1QFY2018 to S$1.68 million in 1QFY2019. The factors contributing to the reduction were largely due to lower bank charges, depreciation of fixed assets, repair and maintenance cost, sales commission, professional fees, staff and related costs.

Finance Costs

1QFY2019 vs 1QFY2018

Finance costs decreased by 7.9% from approximately S$1.85 million in 1QFY2018 to S$1.70 million in 1QFY2019. The decrease was mainly due to lower outstanding bank loans and lower interest rate of the loan from controlling interests.

Income Tax Expense

1QFY2019 vs 1QFY2018

Income tax expense for 1QFY2019 was at approximately S$24,000 as compared to a nil amount in 1QFY2018. The tax expense for 1QFY2019 was due to a revised assessment from the authority for a previously paid tax.

Loss for the period, net of tax

1QFY2019 vs 1QFY2018

As a result of the foregoing, the Group registered a net loss of approximately S$0.77 million in 1QFY2019 as compared to that of S$0.31 million in 1QFY2018.

STATEMENT OF FINANCIAL POSITION

As at 30 September 2018, total current assets stood at approximately S$108.61 million as compared to S$112.69 million as at 30 June 2018. The reduction in total current assets was attributed largely to the transfer of completed properties held for sale to investment properties and the reduction in trade and other receivables, the increase in cash and cash equivalents partially offset the reduction in total current assets.

Total non-current assets increased to approximately S$164.36 million as at 30 September 2018 as compared to approximately S$163.74 million as at 30 June 2018. The increment was attributed mainly to an increase in investment properties from approximately S$151.54 million to approximately S$152.24 million due to additional units of completed projects being leased out.

As at 30 September 2018, total current liabilities reduced to approximately S$106.47 million as compared to approximately S$123.77 million as at 30 June 2018. This was a result of a refinancing of a bank loan and the extension of the repayment date of the loan from controlling interests. The overall reduction in current liabilities was partially offset by the re-classification of loan from controlling interests from non-current liabilities to current liabilities.

Total non-current liabilities increased to approximately S$74.97 million as at 30 September 2018 as compared to approximately S$60.36 million as at 30 June 2018. The increase was mainly due to the reclassification of loan from controlling interests from current liabilities to non-current liabilities and the refinancing of a bank loan previously classified as current liabilities. The overall increase was partially offset by a re-classification of loan from controlling interests from non-current liabilities to current liabilities.

STATEMENT OF CASH FLOWS

Net cash inflow/outflow from operating activities

For the financial period 3 months ended 30 September 2018, the Group generated net cash inflow from operating activities of approximately S$2.74 million as compared to a net cash outflow of approximately S$8.11 million for the corresponding period last year. The net cash inflow was primarily due to collection from trade and other receivables which was partially offset by repayment in trade and other payables, income tax and interest paid.

Net cash inflow in investing activities

The Group recorded net cash inflow of approximately S$30,000 for the financial period 3 months ended 30 September 2018 from investing activities as compared to net cash inflow of approximately S$8.81 million in the corresponding period last year. The net cash inflow in 1QFY2019 was mainly attributed to the proceeds received from the disposal of property, plant and equipment and interest received while 1QFY2018 had a one-off proceed from disposal of assets held for sale.

Net cash outflow from financing activities

The Group recorded net cash outflow of approximately S$2.72 million from financing activities in 1QFY2019 as compared to a net cash outflow of S$5.29 million in the corresponding period last year. The net cash outflow was largely due to the repayment of bank loans and finance leases and additional fixed deposit pledged during the period. The outflow in 1QFY2019 was largely offset by additional bank loan during the period.

As a result of the above, the Group recorded a net increase in cash and cash equivalents of approximately S$0.05 million in 1QFY2019.

Cash and cash equivalents as at 30 September 2018 stood at approximately S$7.12 million (including bank overdraft and fixed deposits pledged that totalled approximately S$4.37 million).

Commentary

Notwithstanding the current state of the industrial real estate market in Singapore, the Group continues to look for attractive industrial land for development opportunities. Given its success in Addition & Alteration ("A&A") works and rental income from its Kim Yam Road, Herencia property, the Group continues to look out for opportunities to undertake A&A to similar buildings to generate a recurrent income stream. The Group is pursuing overseas businesses in the region and has signed a Strategic Cooperation Agreement with Ping An Industrial and Logistics Co., Ltd to develop and manage warehouses in various cities in China. The Group is currently exploring various cities for the potential collaboration with Ping An Industrial and Logistics Co., Ltd.

The Group owns a diverse portfolio of development and investment properties as well as fixed assets. As part of its continuous review, the Group is assessing the relevance of the properties and fixed assets against its overall strategies. The Group may monetise some of these assets through sales so as to further strengthen the financial strength of the Group as it explores new business opportunities.

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